Glenn Fox

Economic Feasibility of Variable-Rate Technology for Nitrogen on Corn

The economic feasibility of three different fertilizer management strategies (constant rate, three-rate and multiple-rate technology) in the application of nitrogen fertilizer to corn are compared under different probability distributions for field fertility. A constant rate was more profitable than either variable-rate technology system for homogeneous fields with low fertility. The application area at which the relative profitability between systems changed was largely determined by the characteristics of the fertility distribution rather than by assumptions regarding costs. Variable-rate technology improves groundwater quality in low-fertility fields by reducing total fertilizer applied and in high-fertility fields by increasing corn yield. Copyright 1999, Oxford University Press.

Damage Control and Increasing Returns

The indirect action of damage control inputs means the marginal productivity of these inputs depends on their effectiveness in controlling the level and size of production loss caused by the damage agent. Increasing returns to damage control inputs can occur even when control and damage functions are concave. The result implies more attention needs to be paid to the functional form selection for damage and control functions in empirical work on pest control and other types of damage control inputs. In addition, the possibility of increasing returns may undermine the general use of taxes to reduce pesticide use.

Is the United States Really Underinvesting in Agricultural Research

That the level of public investment in U.S. agricultural research is too low is widely accepted. This paper argues that there are two important limitations to the evidence assembled in support of the underinvestment hypothesis: (a) many authors have compared the social rate of return to public investments with the private rate of return to private investments; (b) costs of public expenditures on agricultural research have been underestimated by a failure to account for the marginal excess burden of the tax collection system. Taking these two factors into account, evidence in support of the underinvestment hypothesis is weakened considerably.

An economic analysis of the financial viability of switchgrass as a raw material for pulp production in eastern Ontario.

Abstract This paper examines the economic viability of producing switchgrass (Panicum virgatum) to be used as pulp in fine paper production. Pulp mills in eastern Ontario and western Quebec are considered to be the potential market for switchgrass. The potential size of the market for switchgrass pulp is assessed. Budgets for switchgrass are constructed and various measures of the potential market value of switchgrass are calculated. Based on these preliminary findings, it appears that switchgrass could be an attractive crop for farmers in eastern Ontario and western Quebec. The total land area required to satisfy the potential demand for switchgrass fibre for pulping in eastern Ontario is estimated to be between 22,000 and 48,000 hectares. Further agronomic research to examine the productivity of switchgrass on economically marginal and erosion prone lands is indicated.

A bioeconomic model of afforestation in Southern Ontario: integration of fiber, carbon and municipal biosolids values.

This study explores the economic attractiveness of afforestation as a strategy for the joint production of fibre, carbon storage and biosolids (treated municipal sewage sludge) disposal for municipalities in Southern and Central Ontario, Canada. We use a spatial, stochastic model, the Canadian Forest Service Afforestation Feasibility Model (CFS-AFM), to simulate a range of spatial biosolids application scenarios in hybrid poplar afforestation projects. Results suggest that such joint afforestation strategies could be financially attractive. Significant cost savings can be expected through decreases in transportation distances and avoided waste disposal fees. Sensitivity analysis is used to examine the effects of variations in critical model parameters on net present values. Our findings indicate that waste disposal savings from application of biosolids on hybrid poplar plantations combined with incentives for landowners to sequester carbon can easily compete with agricultural land rental values in some regions of Ontario. Social acceptance of this kind of activity, however, may be an impediment to adoption.

The Pricing of Environmental Goods: A Praxeological Critique of Contingent Valuation

ment (Strong, 1992). Sustainable Development is an heroic attempt to integrate thinking about natural resource stewardship and the management of other resources and is noteworthy in several respects. Unlike much of the apocalyptic writing of the 1960’s and 1970’s, sustainable development affirms the need for continued improvement of standards of living. It does not treat natural resource stewardship as a problem separate from other allocation problems of economic goods. It does not call for natural resource preservation regardless of cost. In a pivotal, but apparently not widely read, passage of Our Common Future, &dquo;The Concept of Sustainable Development&dquo; (p. 43-46), the World Commission argues that the gains of natural resource preservation must be compared to the sacrifices incurred in the process of that preservation. How much are clean air, clean water, wildlife habitat and species preservation worth? This is, arguably, the central question of modem environmental economics. How much should be sacrificed to secure these desiderata? Now that the discussion has moved beyond the extreme position that no sacrifice is

The value of precipitation forecast information in winter wheat production

Abstract Many aspects of agricultural production can be adversely affected by weather. Weather forecast services tailored for the specific needs of the farming community are available throughout North America. Estimating the value of these services to farmers is increasingly important as weather service budgets are under increasing scrutiny. A framework to characterize the value of precipitation forecast information to winter wheat producers in the province of Ontario, Canada, is developed. A mean–variance model is used as the basis for this framework. This theoretical framework is applied to precipitation forecast data from the Windsor and the London weather offices for the crop years of 1994 and 1995. Four forecast methods are compared. A naive forecast based on precipitation over the last four days is used as the baseline forecast. The second forecast considered is the daily Environment Canada farm forecast. A third forecast was constructed by arbitrarily improving the accuracy of the Environment Canada forecast by 50%. The fourth forecast considered assumed perfect foresight on the part of producers, in the sense of knowing the actual pattern of precipitation over the next 4 days. Precipitation damage relationships during harvest are developed based on available agronomic data. The value of weather forecast information was found to vary considerably between 1994 and 1995. The level of risk aversion of the producer was also found to be an important determinant of the value of weather forecast information, although some of our results indicate that the value of weather forecast information may be inversely related to the degree of risk aversion. Estimates of the value of precipitation forecast information averaged

An economic comparison of black spruce and jack pine tree improvement

100.00 (CDN)/ha per year.

Returns to beef research in Canada: A comparison of time series and mathematical programming approaches

Abstract Black spruce and jack pine seed orchard programs in Ontario are compared using cost-benefit analysis. The analysis illustrates economic relationships that should be considered when developing tree improvement programs, particularly if budgets are limited. Important factors include stumpage values, potential size of the improved planting program, magnitude of the genetic gain, quality of the land-base, the discount rate and the fecundity of seed orchards through time. Optimal economic rotation ages were calculated for unimproved and improved plantations. The difference in net present value of an infinite number of unimproved and improved plantations was compared to research costs to determine if tree improvement was economically worthwhile. This approach enables each generation of tree improvement activities to be considered on its own potential merits. Jack pine tree improvement consistently outperformed black spruce tree improvement in its economic potential.

Canadian dairy policy and the returns to federal dairy cattle research

Abstract A general equilibrium sectoral model of Canadian agriculture was used to determine whether economic payoffs from investment in beef research might be more completely estimated with mathematical programming than with traditional time series analyses. Using this approach, estimated rates of return to beef research were significantly lower than those estimated in earlier studies that used an econometric approach. At a 5% discount rate, benefit-to-cost ratios generated were 37 to 1 for unadjusted beef research and 30·4 to 1 for beef research adjusted for concomitant effects of crop research. These compare with a benefit-to-cost ratio of about 48 to 1 in earlier econometric studies. Flexibility of the mathematical programming approach provides an opportunity to estimate various secondary impacts of specific agricultural research programs, including regional payoffs, environmental externalities, and interactions with agricultural policies and programs.